Motorola Mobility Holdings Inc (NYSE:MMI) unit, which was acquired by Google Inc (NASDAQ:GOOG), is all set to exit South Korea next year, as a part of reorganization efforts. Over 500 jobs will be slashed as a consequence of exiting from South Korea. Only 10 percent of the local research and development staff of the company will be retained.
Only the mobile device segment of Motorola Mobility Holdings Inc (NYSE:MMI) will exit from South Korea, while two other business divisions, including the Home business and iDEN go-to-market, will be in operation. Over 4000 employees have been laid off since Google Inc (NASDAQ:GOOG) acquired Motorola and initiated reorganization. South Korea was one of the places where Motorola Mobility's research and design unit was situated.
“On December 10th, we began communicating to staff in Korea our plans to close most of our operations in Korea, including our research and development and consumer mobile device marketing organization. The changes in Korea reflect our plans to consolidate our global R&D efforts to foster collaboration, and to focus more attention on markets where we are best positioned to compete effectively. Our Home business and iDEN go-to-market operations will continue operating in Korea. We will also continue to provide customer service and warranty support for mobile devices that have been sold in Korea”, the company said in a statement.
“This was a difficult but necessary decision. We are very proud of the work done by our talented teams in Korea, and the many contributions they have made to our business over the years. We will offer relocation to about 10 percent of our R&D staff there. For other employees, we will strive to make the transition as smooth as possible. We are grateful for the support of our customers in Korea. We’re not releasing numbers or any further specifics at this time, but the 10 percent refers to R&D staff, which is the majority of staff, though not all”.
The company saw its best in the year 2006, when the popular phone, RAZR, sold 200 million units globally. With the advent of app centric phones based on Android, Motorola faced setbacks and its shares dropped. It was purchased by Google. Prior to Motorola Mobility Holdings Inc (NYSE:MMI), phone maker HTC Corp (TPE:2498) also closed its South Korea operations. The reason being because the market is dominated by major players like Samsung Electronics Co., Ltd. (LON:BC94), Apple Inc. (NASDAQ:AAPL), and LG. In October, search engine major Yahoo also declared its plans to exit from Korea.
The withdrawal from South Korea is part of its plan to consolidate its research and development operations, and will also help it focus its attention on markets where it can compete most effectively.